Funding prospectus for new developments
It is rare in the private sector for the client to provide all the funding for its capital projects, and even in the public sector, the government has sought to use external funding for its capital projects by means of the private finance initiative (PFI) and other initiatives.
See Funding options for more information.
To solicit competition and attract good rates from institutions or private investors, while reducing due diligence costs, it can be a worthwhile investment to prepare a well-presented funding prospectus setting out the project's financial requirements.
The prospectus will largely draw on the business case for its content but will also address:
- Intent and summary of the project finances.
- Risk factors.
- Management team.
- Funding criteria including:
- Maturity dates.
- Payments of interest and fixed or floating rates.
- Redemption and options.
- Equity participation.
- Secured or unsecured ranking (lenders of loan capital can be given a charge on assets as security. It might be second bite after a bank or it might be a percentage of assets. Hence the term 'ranking').
- Survivors options in the event of death of a beneficial owner.
- Change in value of underlying assets.
If assistance or advice is required from the consultant team or independent client advisers in the preparation of a funding prospectus, application for grants, etc., then this should be made clear in appointing documents as it may not be included in their standard scope of services.
NB: The damning 2011 House of Commons Treasury Select Committee report on PFI has found '...that PFI projects are significantly more expensive to fund over the life of a project' and that there is no '...clear evidence of savings and benefits in other areas of PFI projects which are sufficient to offset this significantly higher cost of finance'. It is difficult to see where this leaves PFIs, however, as long as PFI continues to allow financing not to appear in government debt figures it is likely to remain a feature of procurement in the UK.
[edit] Related articles on Designing Buildings Wiki
- Budget.
- Business plan.
- Buyer-funded development.
- Construction loan.
- Construction project funding.
- Cost plans.
- Equity and loan capital.
- Funding options.
- Gross development value.
- Mezzanine finance.
- Private Finance Initiative.
- Procurement route.
- Project-based funding.
- Property development finance.
[edit] External links
Featured articles and news
We're expanding our collaborative mission by launching DB Intelligence, an exclusive market research advisory panel. Built environment professionals can now get paid to share their expertise on industry trends, products and services.
Panel members receive direct financial incentives for participating in research projects like short surveys, 1-2-1 interviews and focus groups. Register today to shape the future of the construction sector.
Planning condition discharge in England and Wales
A brief exoplanation from a building compliance expert, with further links.
Overheating guidance and tools for building designers
Guidance for dealing with element of building fabric control that have increasing importance.
Shading for housing, a design guide
From the Good Homes Alliance and British Blind and Shutter Association.
UK Standard Skills Classification (SSC)
A shared framework for describing skills needs.
Social media ban consultation comes to close
CIOB urges UK Government to consider social media’s role in careers guidance in ban debate.
The latest of eight Skills England apprenticeship units
The addition of battery manufacturing welcomed by ECA with a warning about the risks of fast-tracked apprenticeship units.
Building Control Independent Panel final report
A precis of a key report led by Dame Hackitt with full recommendations and link to the government response.
Building Safety recap April, 2026
A short and longer run-through of the month, with links to further information and sources.
CIAT May 2026 briefing.
From medieval scribes to modern word art.
ECA welcomes crackdown on late payment and push for clean energy, whilst CIOB seek fixed cladding removal timeframes.
Cyber Security in the Built Environment
Protecting projects, data, and digital assets: A CIOB Academy TIS.
Managing competence in the built environment
ITFG publishes new industry guide on how to meet the ICC principles.
The UK's campaign to reduce noise pollution: Mythbusting, articles and topic guides.